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ACH Transfer vs. Wire Transfer- What’s the Difference?


Compare ACH and wire transfers to choose the best option for your financial transactions. Understand the differences in cost, speed, and security to make informed decisions.

Read More Wire Transfers at FSB

Key Takeaways

  • ACH transfers are generally free and suitable for regular transactions, while wire transfers offer faster service at a higher cost.
  • ACH transfers typically take 1 to 3 days, whereas wire transfers can be completed within the same day for urgent needs.
  • ACH is used for routine transactions like payroll, while wire transfers are best for large, urgent payments.
  • Discussing your needs with a banker can ensure you choose the most efficient transfer method for your financial situation.

Table of Contents

  1. Introduction to Electronic Transfers
  2. What is an ACH Transfer?
  3. What is a Wire Transfer?
  4. Choosing the Right Transfer Method
  5. Comparison Chart

Introduction to Electronic Transfers

Electronic transfers are the most convenient way to transfer money seamlessly from one account to another. Suppose you regularly facilitate external money transfers or receive your paycheck via direct deposit. You've probably seen one of two terms associated with your transactions: ACH Transfer and Wire Transfer.

While both of these transfers work in similar ways, you should understand several key differences to ensure you're transferring your money as efficiently as possible.

What is an ACH Transfer?

An Automated Clearing House (ACH) transfers money between banks through a third party.

Transaction Types

The ACH network can be used to process several transaction types, including:

  • Payroll deposits for business owners paying their employees
  • Vendor payments to business suppliers
  • Bill pay for both businesses and consumers directly from their bank's online platform
  • Transferring money to friends or family

What Are the Benefits and Limitations of ACH Transfers?

Though fees may apply for expedited services, ACH transfers provide one key benefit: they're almost always free. On average, an ACH transfer will be completed within one to three days, assuming the transferor’s account has sufficient funds to complete the transaction and no fraud is suspected. Thus, ACH transfers are a quick solution to providing payment.

ACH transfers are limited to 1 million dollars daily for consumers and businesses.

What is a Wire Transfer?

Wire transfers work similarly to ACH transfers, but the third party is eliminated in this case.

How Are Wire Transfers Used?

Wire transfers are most often used for:

  • International payments to friends or family (sometimes called remittance transfers or international money transfers)
  • Payments that need to be received same-day
  • Large transactions

What Are the Benefits and Limitations of Wire Transfers?

While wire transfers are rapid, they do come at a cost. As there is no national regulation determining how banks can set their wire transfer fees, they can vary significantly between financial institutions, with only the exception of state-specific regulations that may be in place.

Fees typically range anywhere from $20 - $75 per transaction. It is important to note that maximum wire transfer limits vary among banks, so be sure to check your financial institution's policies.

It is also tough, if not impossible, to reverse a wire transfer once it has been initiated. As scammers will often request money via wire transfer, verifying the legitimacy of any request from someone you don't know with your financial institution before initiating the transaction is essential.

Luckily, financial institutions are armed with thorough verification processes to provide you with safe and secure wire transfer services.

Choosing the Right Transfer Method

Determining the best option for your electronic transfer depends on the speed at which the funds need to be received.

Key Questions for Choosing Your Transfer Method

Consider these factors before initiating a transfer:

  • How much money do you plan to send?
  • Are you willing to pay a fee, and if so, how much?

Comparing ACH Transfers vs. Wire Transfers

Feature ACH TransferWire Transfer


1-3 days for processing

Same-day processing


Usually free, small fee for expedited services

Fees range from $20 to $75 per transaction


Secure, with fraud prevention checks in place

Secure, but hard to reverse once initiated, making it a preferred method for fraudsters


Payroll, bill payments, peer-to-peer transfers

Large transactions, international transfers, urgent payments

Transaction Limits

Usually up to $1 million per day

Varies by bank, often higher limits

If you are deciding between these two options, consider discussing your transfer needs with your banker before initiating it to ensure you're making the most efficient decision for your funds.

Contact a Banker


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